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11 Cards in this Set
- Front
- Back
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Line Extension
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Applying the parent brand to a new product that targets a new market segment within a product category the parent brand currently serves
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Category Extension
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Applying the parent brand to enter a different product category
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Parent Brand
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An existing brand that gives birth to a brand extension
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Brand Extensions
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Occurs when a firm uses an established brand name to introduce a new product
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Advantages of Brand Extension
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The popularity has been fueled by the rising cost of introducing new brands and by growing realization among companies that their investments can be leveraged.
* Help facilitate new product acceptance & provide feedback benefits of the parent brand |
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Brand Extension Facilitate New Product Acceptance*
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1. Improve brand image
2. Reducing consumers perceived risk 3. Raising the probability of gaining distribution and trial 4. Increasing the efficiency of promotional expenditures 5. Lowering the cost of introductory and follow-up marketing programs 6. Avoiding new brand development 7. Allowing for packing and labeling efficiencies 8. Permitting consumer variety seeking |
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Providing Feedback Benefits*
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1. Clarifying the meaning of a brand
2. Enhancing the parent brand image 3. Attracting new consumers to the brand franchise and increasing market coverage 4. Facilitating subsequent extensions 5. Revitalize the brand* |
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Disadvantages of Brand Extension
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1. Confuse or frustrate consumers
2. Encounter retailer resistance 3. Hurt the parent brand image if they fail 4. Succeed but cannibalize sales of the parent brand 5. Succeed but diminish identification with any one category 6. Succeed but hurt the image of the parent brand 7. Dilute the overall meaning of the brand parent 8. Cause the company to forgo the opportunity to develop a new brand |
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Consumer Evaluations of Brand Extension
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Managerial assumptions, brand equity and vertical brand extensions
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4 Managerial Assumptions
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1. Consumers have some awareness of and positive associations about the parent brand in memory.
2. At least some of these positive associations will be evoked by the brand extension 3. Negative associations are not transferred from the parent brand 4. Negative associations are not created by the brand extensions |
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Evaluating Brand Extension Opportunities
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1. Define actual and desired consumer knowledge about the brand
2. Identify possible extension candidates 3. Evaluate the potential of the extension candidate 4. Evaluate the extension candidate feedback effects 5. Consider possible competitive advantages as perceived by consumers 6. Design marketing campaign to launch 7. Evaluate extension success and effects on parent brand |
